Hearthstone is devoted exclusively to the business of building and selling homes. Since our founding in 1992, we have been involved in 120,000 homes and lots in 20 states through 461 communities across the nation. During the last housing cycle of the 2000’s, in aggregate, Hearthstone communities profitably delivered unit volumes ranking it among the top 20 builders in the nation.

What is unique about Hearthstone is that rather than owning our divisions across the country, we partner with the leading local private builders in the key markets we seek to serve. Given the highly local nature of homebuilding, private builders have been and will continue to deliver approximately 70% of the nation’s homes. Hearthstone owns the land and provides the capital required to build each community, in a process similar to a large public builder. Given their undivided local focus, our builder partners have a proprietary land pipeline. Then, just like a public builder, they execute the design, build and sale of the community.

Hearthstone seeks to maintain a merchant builder profile: three to four year land supply in communities of 50 to 250 units with sales of three to four homes per month, targeted at the center of the market: high entry level and first and second move up buyers.

Over the past 20 years we have enjoyed the advantage of our business model being uniquely nimble, quickly scalable both up and down on a low cost national basis. Unburdened by fixed overhead of owned divisions with attendant ramp up and wind down costs, and without the premium paid for private builder acquisitions, Hearthstone enters markets with “just in time” communities, with the flexibility to readily exit when market conditions change. As our local division private builder partners are typically focused on just one region, they are highly entrepreneurial and driven to build the business undistracted by corporate overhang and bureaucracy while knowing Hearthstone is deeply committed and experienced in helping them profitably grow their business.

We believe the coming housing cycle presents significant opportunities for our shareholders and private builder partners for profitable growth. Rigorous market selection and capital allocation combined with careful, detailed execution will enable Hearthstone to achieve profitable home volumes ranking it among the largest in the country.